Question 527. - A holds first mortgage for $2,600 on town property worth, say, $10,000, of which $6,000 is site value and $4,000 is the value of the buildings. There is $2,000 in insurance on the buildings, payable, in the event of loss, to A. B bank has a second mortgage on the same property for $3,000, and holds fire insurance policies to the amount of $1,500 on the same buildings under which the loss, if any, is payable to the bank. A contends that in the event of total fire loss he would get $600 from the bank's insurance under his first mortgage, and insists on the bank's policies being re-written to fully protest his first mortgage. In the event of loss, with policies remaining as above, can A recover from the bank any part of the insurance money in its policy?

Answer. - The holder of a first mortgage is entitled to all moneys received on an insurance of the property mortgaged unless there is a special contract to the contrary. The assignment to the bank in the instance cited might, perhaps, be claimed to be in the nature of such a special contract, and A would appear to be within his rights in demanding that his claim under the first mortgage to all insurance moneys up to the amount due him should be placed beyond question. Whether, in the event of loss and the bank having been actually paid the amount of its claim under the second mortgage, A could recover any part of it from the bank is a question of law that would have to be decided upon the facts.